Correlation Between Vela Short and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Vela Short and Sterling Capital at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Vela Short and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vela Short Duration and Sterling Capital Short, you can compare the effects of market volatilities on Vela Short and Sterling Capital and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Vela Short with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vela Short and Sterling Capital.
Diversification Opportunities for Vela Short and Sterling Capital
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vela and Sterling is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Vela Short Duration and Sterling Capital Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Short and Vela Short is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Vela Short Duration are associated (or correlated) with Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital Short has no effect on the direction of Vela Short i.e., Vela Short and Sterling Capital go up and down completely randomly.
Pair Corralation between Vela Short and Sterling Capital
Assuming the 90 days horizon Vela Short Duration is expected to generate 1.04 times more return on investment than Sterling Capital. However, Vela Short is 1.04 times more volatile than Sterling Capital Short. It trades about 0.05 of its potential returns per unit of risk. Sterling Capital Short is currently generating about 0.03 per unit of risk. If you would invest 1,003 in Vela Short Duration on November 6, 2024 and sell it today you would earn a total of 2.00 from holding Vela Short Duration or generate 0.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vela Short Duration vs. Sterling Capital Short
Performance |
| Timeline |
| Vela Short Duration |
| Sterling Capital Short |
Vela Short and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vela Short and Sterling Capital
The main advantage of trading using opposite Vela Short and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vela Short position performs unexpectedly, Sterling Capital can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sterling Capital will offset losses from the drop in Sterling Capital's long position.| Vela Short vs. Gabelli Convertible And | Vela Short vs. Fidelity Sai Convertible | Vela Short vs. Calamos Dynamic Convertible | Vela Short vs. Allianzgi Convertible Income |
| Sterling Capital vs. Financials Ultrasector Profund | Sterling Capital vs. Voya Government Money | Sterling Capital vs. Schwab Government Money | Sterling Capital vs. Blackstone Secured Lending |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |